Core Laboratories Q3 2026 net income falls 62%
A $5.3 million prior-year insurance recovery is part of the comparison, and the company reported compliance with its debt covenants.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Core Laboratories Inc. reported third-quarter 2026 revenue of $132.1 million, down 2% from $134.5 million a year earlier. Product sales rose 8% to $36.1 million while services revenue declined 5% to $96.0 million. Operating income fell 42% to $12.1 million, and net income attributable to Core Laboratories Inc. fell 62% to $5.4 million; diluted earnings per share attributable to the company were $0.12, versus $0.30.
For the first nine months, revenue was $378.5 million versus $388.3 million, and net income attributable to the company was $10.6 million versus $24.7 million. Operating cash flow was $16.7 million, compared with $29.1 million. The prior-year quarter included a $5.3 million net insurance recovery for property and assets; Core Lab said the insurance settlement was final in September 2025.
At September 30, 2026, long-term debt, net, was $112.4 million and available borrowing capacity under the credit facility was approximately $81.6 million. The company reported compliance with all credit-facility and senior-note covenants. Core Lab said reduced crude-oil trading and maritime transport had directly affected, and were expected to continue affecting, demand for its laboratory assay services. It declared a quarterly dividend of $0.01 per share, payable November 30, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- None.
Negative
- Moderate pointOperating income fell 42% to $12.1 million in Q3 2026.
- Moderate pointOperating cash flow was $16.7 million, versus $29.1 million in the first nine months of 2025.
Filing Explained
The lower September 30, 2026 share count (45,808,096 versus 46,095,379 at December 31, 2025) increases the ownership fraction of an unchanged holding.
The debt table reports
During the nine months ended September 30, 2026, Core Lab reported repurchasing 354,366 shares for
The filing identifies earlier-maturity checks on
Key Figures
Key Terms
delayed draw term loan financial
SOFR financial
interest coverage ratio financial
leverage ratio financial
cash flow hedging financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were CLB's Q3 2026 revenue and earnings?
How much operating cash flow did CLB report?
What debt and borrowing capacity did CLB report at September 30, 2026?
What dividend did CLB declare in October 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from ________________ to ______________
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
(
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Smaller reporting company |
Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares outstanding of the registrant’s Common Stock (par value $0.01) at October 23, 2026 was
CORE LABORATORIES INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2026
INDEX
PART I - FINANCIAL INFORMATION
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Page |
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Item 1. |
Financial Statements |
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Consolidated Balance Sheets at September 30, 2026 (Unaudited) and December 31, 2025 |
3 |
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Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2026 and 2025 (Unaudited) |
4 |
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Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2026 and 2025 (Unaudited) |
6 |
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Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2026 and 2025 (Unaudited) |
7 |
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Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2026 and 2025 (Unaudited) |
9 |
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Notes to the Interim Consolidated Financial Statements (Unaudited) |
10 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
20 |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
34 |
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Item 4. |
Controls and Procedures |
34 |
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PART II - OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
35 |
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Item 1A. |
Risk Factors |
35 |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
35 |
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Item 5. |
Other Information |
36 |
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Item 6. |
Exhibits |
37 |
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Signature |
38 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CORE LABORATORIES INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
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September 30, |
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December 31, |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net of allowance for credit losses |
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Inventories |
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Prepaid expenses |
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Income taxes receivable |
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Other current assets |
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TOTAL CURRENT ASSETS |
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PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation |
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RIGHT OF USE ASSETS |
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INTANGIBLES, net of accumulated amortization and impairment |
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GOODWILL |
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DEFERRED TAX ASSETS, net |
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OTHER ASSETS |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ |
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$ |
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Accrued payroll and related costs |
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Taxes other than payroll and income |
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Unearned revenues |
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Operating lease liabilities |
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Income taxes payable |
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Other current liabilities |
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TOTAL CURRENT LIABILITIES |
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LONG-TERM DEBT, net |
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LONG-TERM OPERATING LEASE LIABILITIES |
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DEFERRED COMPENSATION |
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DEFERRED TAX LIABILITIES, net |
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OTHER LONG-TERM LIABILITIES |
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COMMITMENTS AND CONTINGENCIES |
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EQUITY: |
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Preference stock, |
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Common stock, |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive income (loss) |
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( |
) |
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( |
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Treasury stock (at cost), |
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( |
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( |
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Total Core Laboratories Inc. shareholders' equity |
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Non-controlling interest |
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TOTAL EQUITY |
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TOTAL LIABILITIES AND EQUITY |
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$ |
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$ |
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The accompanying notes are an integral part of these interim consolidated financial statements.
3
Return to Index
CORE LABORATORIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
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Three Months Ended |
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September 30, |
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2026 |
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2025 |
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(Unaudited) |
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REVENUE: |
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Services |
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$ |
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$ |
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Product sales |
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Total revenue |
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OPERATING EXPENSES: |
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Cost of services, exclusive of depreciation expense shown below |
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Cost of product sales, exclusive of depreciation expense shown below |
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General and administrative expense, exclusive of depreciation expense shown below |
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Depreciation |
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Amortization |
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Other (income) expense, net |
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( |
) |
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( |
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OPERATING INCOME |
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Interest expense |
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Income before income taxes |
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Income tax expense |
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Net income |
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Net income (loss) attributable to non-controlling interest |
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Net income attributable to Core Laboratories Inc. |
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$ |
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$ |
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EARNINGS PER SHARE INFORMATION: |
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Basic earnings per share |
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$ |
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$ |
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Basic earnings per share attributable to Core Laboratories Inc. |
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$ |
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$ |
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Diluted earnings per share |
|
$ |
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$ |
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Diluted earnings per share attributable to Core Laboratories Inc. |
|
$ |
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$ |
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these interim consolidated financial statements.
4
Return to Index
CORE LABORATORIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
|
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Nine Months Ended |
|
|||||
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September 30, |
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|||||
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2026 |
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2025 |
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(Unaudited) |
|
|||||
REVENUE: |
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|
||
Services |
|
$ |
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$ |
|
||
Product sales |
|
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Total revenue |
|
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||
OPERATING EXPENSES: |
|
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|
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Cost of services, exclusive of depreciation expense shown below |
|
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|
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Cost of product sales, exclusive of depreciation expense shown below |
|
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|
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General and administrative expense, exclusive of depreciation expense shown below |
|
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Depreciation |
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Amortization |
|
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Other (income) expense, net |
|
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( |
) |
|
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( |
) |
OPERATING INCOME |
|
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|
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Interest expense |
|
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Income before income taxes |
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Income tax expense |
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Net income |
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||
Net income (loss) attributable to non-controlling interest |
|
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( |
) |
|
|
|
|
Net income attributable to Core Laboratories Inc. |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
EARNINGS PER SHARE INFORMATION: |
|
|
|
|
|
|
||
Basic earnings per share |
|
$ |
|
|
$ |
|
||
Basic earnings per share attributable to Core Laboratories Inc. |
|
$ |
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$ |
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||
|
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||
Diluted earnings per share |
|
$ |
|
|
$ |
|
||
Diluted earnings per share attributable to Core Laboratories Inc. |
|
$ |
|
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$ |
|
||
|
|
|
|
|
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|
||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |
|
|
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|
||
Basic |
|
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|
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|
||
Diluted |
|
|
|
|
|
|
||
The accompanying notes are an integral part of these interim consolidated financial statements.
5
Return to Index
CORE LABORATORIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
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September 30, |
|
||||||||||
|
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2026 |
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2025 |
|
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2026 |
|
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2025 |
|
||||
|
|
(Unaudited) |
|
|||||||||||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other comprehensive income (loss): |
|
|
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|
|
|
|
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|
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|
||||
Interest rate swaps: |
|
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|
|
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|
|
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|
||||
Interest rate swap amount reclassified to net income |
|
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|
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( |
) |
|
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|
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( |
) |
||
Income tax benefit (expense) on interest rate swaps reclassified to net income |
|
|
( |
) |
|
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|
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( |
) |
|
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|
||
Total interest rate swaps |
|
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|
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( |
) |
|
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( |
) |
||
Pension and other postretirement benefit plans: |
|
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||||
Amortization of actuarial gain reclassified to net income |
|
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|
||||
Income tax expense on pension and other postretirement benefit plans reclassified to net income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total pension and other postretirement benefit plans |
|
|
|
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|
|
|
|
|
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|
||||
Total other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Comprehensive income |
|
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|
|
|
|
|
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|
||||
Comprehensive income (loss) attributable to non-controlling interest |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Comprehensive income attributable to Core Laboratories Inc. |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The accompanying notes are an integral part of these interim consolidated financial statements.
6
Return to Index
CORE LABORATORIES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share and per share data)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
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September 30, |
|
||||||||||
|
|
2026 |
|
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2025 |
|
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2026 |
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2025 |
|
||||
|
|
(Unaudited) |
|
|||||||||||||
Common Stock |
|
|
|
|||||||||||||
Balance at Beginning of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Balance at End of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Additional Paid-In Capital |
|
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|
|
|
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|
||||
Balance at Beginning of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at End of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Retained Earnings |
|
|
|
|
|
|
|
|
|
|
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|
||||
Balance at Beginning of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Dividends paid |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income attributable to Core Laboratories Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at End of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accumulated Other Comprehensive Income (Loss) |
|
|
|
|
|
|
|
|
|
|
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|
||||
Balance at Beginning of Period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Interest rate swaps, net of income taxes |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Pension and other postretirement benefit plans, net of income taxes |
|
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|
||||
Balance at End of Period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Treasury Stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at Beginning of Period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
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|
||||
Repurchase of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at End of Period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Non-Controlling Interest |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at Beginning of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Non-controlling interest contribution |
|
|
|
|
|
|
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|
|
|
||||
Non-controlling interest dividend |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Net income (loss) attributable to non-controlling interest |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Balance at End of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total Equity |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at Beginning of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-controlling interest contribution |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-controlling interest dividend |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Dividends paid |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swaps, net of income taxes |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Pension and other postretirement benefit plans, net of income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Repurchase of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at End of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash Dividends per Share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The accompanying notes are an integral part of these interim consolidated financial statements.
7
Return to Index
CORE LABORATORIES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(In thousands, except share and per share data)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
|
|
(Unaudited) |
|
|||||||||||||
Common Stock - Number of shares issued |
|
|
|
|||||||||||||
Balance at Beginning of Period |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at End of Period |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Treasury Stock - Number of shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at Beginning of Period |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Repurchase of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at End of Period |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common Stock - Number of shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at Beginning of Period |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Repurchase of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at End of Period |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The accompanying notes are an integral part of these interim consolidated financial statements.
8
Return to Index
CORE LABORATORIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
Nine Months Ended |
|
|||||
|
|
September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
|
|
(Unaudited) |
|
|||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Stock-based compensation |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Inventory write-off and obsolescence |
|
|
|
|
|
|
||
Net provision for credit losses |
|
|
|
|
|
|
||
Changes in value of life insurance policies |
|
|
( |
) |
|
|
( |
) |
Deferred income taxes |
|
|
|
|
|
( |
) |
|
Insurance recovery on property, plant and equipment, net |
|
|
|
|
|
( |
) |
|
Realization of pension obligation |
|
|
|
|
|
|
||
Other non-cash items |
|
|
( |
) |
|
|
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Inventories |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
( |
) |
Other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
|
|
|
|
||
Accrued expenses |
|
|
( |
) |
|
|
( |
) |
Unearned revenues |
|
|
|
|
|
( |
) |
|
Other liabilities |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Capital expenditures - operations |
|
|
( |
) |
|
|
( |
) |
Capital expenditures - rebuilding of Aberdeen facility |
|
|
( |
) |
|
|
( |
) |
Net proceeds from insurance recovery |
|
|
|
|
|
|
||
Acquisitions, net of cash acquired |
|
|
|
|
|
( |
) |
|
Proceeds from sale of assets |
|
|
|
|
|
|
||
Patents and other intangibles |
|
|
|
|
|
( |
) |
|
Net proceeds on life insurance policies |
|
|
|
|
|
|
||
Net cash provided by (used in) investing activities |
|
|
( |
) |
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Repayment of long-term debt |
|
|
( |
) |
|
|
( |
) |
Proceeds from long-term debt |
|
|
|
|
|
|
||
Debt issuance costs |
|
|
|
|
|
( |
) |
|
Dividends paid |
|
|
( |
) |
|
|
( |
) |
Repurchase of common stock |
|
|
( |
) |
|
|
( |
) |
Other financing activities |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
|
( |
) |
|
|
|
|
CASH AND CASH EQUIVALENTS, beginning of period |
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS, end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
||
Cash payments for interest |
|
$ |
|
|
$ |
|
||
Cash payments (net of refunds) for income taxes |
|
$ |
|
|
$ |
|
||
Non-cash investing and financing activities: |
|
|
|
|
|
|
||
Capital expenditures incurred but not paid for as of the end of the period |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these interim consolidated financial statements.
9
Return to Index
CORE LABORATORIES INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. DESCRIPTION OF BUSINESS
References to “Core Lab”, “Core Laboratories”, the “Company”, “we”, “our” and similar phrases are used throughout this Quarterly Report on Form 10-Q (“Quarterly Report”) and relate collectively to Core Laboratories Inc. and its consolidated subsidiaries.
We operate our business in
2. SIGNIFICANT ACCOUNTING POLICIES UPDATE
Basis of Presentation and Principles of Consolidation
The accompanying unaudited interim consolidated financial statements include the accounts of Core Laboratories Inc. and its subsidiaries for which we have a controlling voting interest and/or a controlling financial interest. These financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information using the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information and footnote disclosures required by U.S. GAAP for the annual financial statements and should be read in conjunction with the audited financial statements and notes thereto included in Core Laboratories Inc.’s Annual Report on Form 10-K for the year ended December 31, 2025, including Note 2 - Summary of Significant Accounting Policies. Core Laboratories Inc.’s balance sheet information as of December 31, 2025, was derived from the 2025 audited consolidated financial statements. There have been no changes to the accounting policies during the nine months ended September 30, 2026, except as noted below.
Core Laboratories Inc. uses the equity method of accounting for investments in which it has less than a majority interest and does not exercise control but does exert significant influence. Non-controlling interest has been recorded to reflect outside ownership attributable to consolidated subsidiaries that are less than 100% owned. All intercompany transactions and balances have been eliminated in consolidation.
In the opinion of management, all adjustments considered necessary for a fair statement of the results for the interim periods presented have been included in these financial statements. However, the operating results presented for the three and nine months ended September 30, 2026, may not necessarily be indicative of the results that may be expected for the year ending December 31, 2026.
Certain reclassifications were made to prior period amounts included in this Quarterly Report in order to conform to the current period presentations. Refer to Core Laboratories Inc.’s Annual Report on Form 10-K for the year ended December 31, 2025, Note 2 - Summary of Significant Accounting Policies - Prior Period Immaterial Corrections. Specifically, the Company has made adjustments to previously reported beginning retained earnings and total assets as of and for the three and nine months ended September 30, 2025. These reclassifications had no impact on the reported net income or cash flows for the three and nine months ended September 30, 2025.
Property, Plant and Equipment
We review our long-lived assets (“LLA”) for impairment when events or changes in circumstances indicate that their net book value may not be recovered over their remaining service lives. Indicators of possible impairment may include significant declines in activity levels in regions where specific assets or groups of assets are located, extended periods of idle use, declining revenue or cash flow or overall changes in general market conditions.
10
Return to Index
We have performed assessments for LLA located in regions impacted by geopolitical conflicts in the Middle East and between Russia and Ukraine and no triggering events have been identified to indicate that their net book value may not be recoverable as of September 30, 2026.
Recent Accounting Pronouncements
Pronouncements Adopted in 2026
In July 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-05 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which allows public business entities to apply a practical expedient when estimating expected credit losses that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendment is effective for annual and interim periods beginning after December 15, 2025. We adopted the guidance during the nine months ended September 30, 2026. The Company has elected to apply the practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. When an account is determined to be uncollectible, we charge the receivable to our allowance for credit losses.
Issued But Not Yet Effective
In November 2024, FASB issued ASU 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) to improve disclosures about a public business entity’s expenses, by providing more detailed information about the types of expenses in commonly presented expense captions. As amended by ASU 2025-01 issued in January 2025, the amendment is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendment may be applied prospectively or retrospectively. Upon adoption, our disclosures regarding expenses will be expanded.
3. ACQUISITIONS AND DIVESTITURES
We had
4. INVENTORIES
Inventories consist of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
Finished goods |
|
$ |
|
|
$ |
|
||
Parts and materials |
|
|
|
|
|
|
||
Work in progress |
|
|
|
|
|
|
||
Total inventories |
|
$ |
|
|
$ |
|
||
We include freight costs incurred for shipping inventory to our clients in the cost of product sales caption in the accompanying consolidated statements of operations.
5. LEASES
Our operating leases primarily consist of offices and lab space, machinery, equipment, and vehicles. We terminated certain leases in the U.S. and other international locations during the nine months ended September 30, 2026 and 2025. See Note 12 - Other (Income) Expense, net for additional information regarding lease termination costs.
11
Return to Index
The components of lease expense and other information are as follows (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Consolidated Statements of Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating lease expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Short-term lease expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Variable lease expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total lease expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Consolidated Statements of Cash Flows: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating cash flows - operating leases payments |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Right of use assets obtained in exchange for |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other information: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average remaining lease term - operating leases |
|
|
|
|
|
|
|
|
||||||||
Weighted-average discount rate - operating leases |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Scheduled undiscounted lease payments for non-cancellable operating leases consist of the following (in thousands):
|
|
September 30, 2026 |
|
|
|
|
Operating Leases |
|
|
Remainder of 2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted lease payments |
|
|
|
|
Less: Imputed interest |
|
|
( |
) |
Total operating lease liabilities |
|
$ |
|
|
6. LONG-TERM DEBT, NET
We have
|
Interest Rate |
|
Maturity Date |
|
September 30, |
|
|
December 31, |
|
||
Revolving Credit Facility |
Variable |
|
|
$ |
|
|
$ |
|
|||
Delayed Draw Term Loan |
Variable |
|
|
|
|
|
|
|
|||
2021 Senior Notes Series A (1) |
|
|
|
|
|
|
|
||||
2021 Senior Notes Series B (1) |
|
|
|
|
|
|
|
||||
2023 Senior Notes Series A (2) |
|
|
|
|
|
|
|
||||
2023 Senior Notes Series B (2) |
|
|
|
|
|
|
|
||||
Total long-term debt |
|
|
|
|
|
|
|
|
|
||
Less: Debt issuance costs |
|
|
|
|
|
( |
) |
|
|
( |
) |
Long-term debt, net |
|
|
|
|
$ |
|
|
$ |
|
||
(1)
(2)
On July 22, 2025, we, along with our direct subsidiary Core Laboratories (U.S.) Interests Holdings, Inc. (“CLIH”) entered into the Ninth Amended and Restated Credit Agreement (as amended, the “Credit Facility”) for an aggregate borrowing
12
Return to Index
commitment of $
The Credit Facility is secured by first priority interests in (1) substantially all of the tangible and intangible personal property, and equity interest of CLIH and certain of the Company’s U.S. and foreign subsidiary companies and (2) instruments evidencing intercompany indebtedness owing to the Company, CLIH and certain of the Company’s U.S. and foreign subsidiary companies. Certain of our material, wholly owned subsidiaries are guarantors or co-borrowers under the Credit Facility and Senior Notes.
Under the Credit Facility, the Secured Overnight Financing Rate (“SOFR”) plus
The Credit Facility and Senior Notes include a cross-default provision, whereby a default under one agreement may trigger a default in the other agreements.
The terms of the Credit Facility and Senior Notes require us to meet certain covenants, including, but not limited to, an interest coverage ratio (calculated as consolidated EBITDA divided by interest expense) and a leverage ratio (calculated as consolidated net indebtedness divided by consolidated EBITDA), where consolidated EBITDA (as defined in each agreement) and interest expense are calculated using the most recent four fiscal quarters. The Credit Facility has more restrictive covenants with a minimum interest coverage ratio of
We, along with CLIH as issuer, have senior notes outstanding that were issued through private placement transactions. Series B of the 2021 Senior Notes were issued in 2021 (the “2021 Senior Notes”). Series A and Series B of the 2023 Senior Notes were issued in 2023 (the “2023 Senior Notes”). The 2021 Senior Notes and the 2023 Senior Notes are collectively the “Senior Notes”. On January 12, 2026, we repaid the 2021 Senior Notes Series A with aggregate principal amount of $
See Note 10 - Derivative Instruments and Hedging Activities for additional information regarding interest rate swap agreements we have entered to fix the underlying risk-free rate on our 2023 Senior Notes.
13
Return to Index
The estimated fair value of total debt at September 30, 2026 and December 31, 2025, approximated the book value of total debt. The fair value was estimated using Level 2 inputs by calculating the sum of the discounted future interest and principal payments through the maturity date.
7. PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
Prior to January 2020, one of our subsidiaries provided a noncontributory defined benefit pension plan covering substantially all of our Dutch employees who were hired prior to 2000 (“Dutch Plan”). This pension benefit was based on years of service and final pay or career average pay, depending on when the employee began participating. The Dutch Plan was curtailed prior to January 2020, and these employees have been moved into the Dutch defined contribution plan. However, the unconditional indexation for this group of participants continues for so long as they remain in active service with the Company.
The components of net periodic pension cost for the Dutch Plan include (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Interest cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Expected return on plan assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net periodic pension cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
8. COMMITMENTS AND CONTINGENCIES
We have been and may, from time to time, be named as a defendant in legal actions that arise in the ordinary course of business. These include, but are not limited to, employment-related claims and contractual disputes or claims for personal injury or property damage which occur in connection with the provision of our services and products. A liability is accrued when a loss is both probable and can be reasonably estimated.
9. EQUITY
Treasury Stock
During the three and nine months ended September 30, 2026, we distributed
Dividend Policy
In March, June and August 2026, we paid a quarterly cash dividend of $
Accumulated Other Comprehensive Income (Loss)
Amounts recognized, net of income tax, in accumulated other comprehensive income (loss) consist of the following (in thousands):
14
Return to Index
|
|
September 30, |
|
|
December 31, |
|
||
Pension and other post-retirement benefit plans - unrecognized prior service costs and net actuarial loss |
|
$ |
( |
) |
|
$ |
( |
) |
Interest rate swaps - net gain (loss) on fair value |
|
|
( |
) |
|
|
( |
) |
Total accumulated other comprehensive income (loss) |
|
$ |
( |
) |
|
$ |
( |
) |
Retained Earnings
The beginning balances of retained earnings and total equity for the three and nine months ended September 30, 2025 have been adjusted for certain prior period immaterial corrections. See Note 2 - Summary of Significant Accounting Policies Update.
10. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
We are exposed to market risks related to fluctuations in interest rates. To mitigate these risks, we may utilize derivative instruments in the form of interest rate swaps. We do not enter into derivative transactions for speculative purposes.
The payments of interest under the 2023 Senior Notes with an aggregate principal amount of $
The effect of interest rate swaps on the consolidated statements of operations is as follows (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
|
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
Income Statement |
||||
Derivatives designated as hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
5 year interest rate swap |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
Increase (decrease) to interest expense |
|||
10 year interest rate swap |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Increase (decrease) to interest expense |
||
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
||
11. FINANCIAL INSTRUMENTS
The Company’s only financial assets and liabilities which are measured at fair value on a recurring basis relate to certain aspects of the Company’s benefit plans. We use the market approach to determine the fair value of these assets and liabilities using significant other observable inputs (Level 2) with the assistance of third-party specialists. We do not have any assets or liabilities measured at fair value on a recurring basis using quoted prices in an active market (Level 1) or significant unobservable inputs (Level 3). Gains and losses related to the fair value changes in the financial assets and liabilities are recorded in general and administrative expense in the consolidated statements of operations.
15
Return to Index
The following table summarizes the fair value balances (in thousands):
|
|
|
|
|
Fair Value Measurement at |
|
||||||||||
|
|
|
|
|
September 30, 2026 |
|
||||||||||
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Company owned life insurance policies (1) |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred compensation liabilities |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
|
|
|
|
|
Fair Value Measurement at |
|
||||||||||
|
|
|
|
|
December 31, 2025 |
|
||||||||||
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Company owned life insurance policies (1) |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred compensation liabilities |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
(1) Company owned life insurance policies have cash surrender value and are intended to assist in funding deferred compensation liabilities and other benefit plans.
12. OTHER (INCOME) EXPENSE, NET
The components of other (income) expense, net, are as follows (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Gain on sale of assets |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Results of non-consolidated subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange (gain) loss, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Return on pension assets and other pension costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Assets write-down, loss on lease termination and other exit costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Insurance recovery - business interruption and costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Insurance recovery, net - property, plant and equipment |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Severance and other charges |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total other (income) expense, net |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
As a result of our continuous efforts in consolidating and exiting certain facilities in the U.S. and other international locations for operational efficiency, we sold property in Tulsa, Oklahoma for a net gain of $
In February 2024, we had a fire incident at our Aberdeen, U.K. facility, and we have recorded insurance recovery associated with business interruption and other associated costs of $
Additionally, we recorded a net insurance recovery associated with loss on property and assets of $
16
Return to Index
In January 2026, we had storm damage at one of our laboratory facilities in Europe, and we have recorded a partial insurance settlement associated with business interruption and other associated costs of $
Foreign exchange (gain) loss, net for the primary currencies in which we operate and those with a material effect for the period presented is summarized in the following table (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
British Pound |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Canadian Dollar |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Euro |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Indonesian Rupiah |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Russian Ruble |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Other currencies, net |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange (gain) loss, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
13. INCOME TAX EXPENSE
The Company recorded an income tax expense of $
14. EARNINGS PER SHARE
We compute basic earnings per share by dividing net income attributable to Core Laboratories Inc. by the number of weighted average common shares outstanding during the period. Diluted earnings per share includes the incremental effect of contingently issuable shares from performance and restricted stock awards, as determined using the treasury stock method.
The following table summarizes the calculation of weighted average common shares outstanding used in the computation of basic and diluted earnings per share (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Weighted average common shares outstanding - basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Performance shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
15. SEGMENT REPORTING
We operate our business in
17
Return to Index
We use the same accounting policies to prepare our operating segment results as are used to prepare our consolidated financial statements. All interest and other non-operating income (expense) is attributable to Corporate & Other and is not allocated to specific operating segments.
Our chief operating decision maker (“CODM”) is our Chief Executive Officer, who also serves as Chairman of the Board of Directors.
Summarized financial information of our operating segments is shown in the following table (in thousands):
18
Return to Index
|
|
Reservoir |
|
|
Production |
|
|
Corporate & |
|
|
Consolidated |
|
||||
Three months ended September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CODM Measure - Revenue from unaffiliated clients |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Reconciliation of CODM measure - revenue from unaffiliated clients to segment operating income: |
|
|||||||||||||||
Inter-segment revenue |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Cost of services and product sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative expense (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating (income) expense, net (3) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Foreign exchange (gain) loss, net (3) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CODM Measure - Segment operating income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Three months ended September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CODM Measure - Revenue from unaffiliated clients |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Reconciliation of CODM measure - revenue from unaffiliated clients to segment operating income: |
|
|||||||||||||||
Inter-segment revenue |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Cost of services and product sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative expense (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating (income) expense, net (3) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Foreign exchange (gain) loss, net (3) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
CODM Measure - Segment operating income |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets (4) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Nine months ended September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CODM Measure - Revenue from unaffiliated clients |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Reconciliation of CODM measure - revenue from unaffiliated clients to segment operating income: |
|
|||||||||||||||
Inter-segment revenue |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Cost of services and product sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative expense (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating (income) expense, net (3) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Foreign exchange (gain) loss, net (3) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CODM Measure - Segment operating income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Nine months ended September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CODM Measure - Revenue from unaffiliated clients |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Reconciliation of CODM measure - revenue from unaffiliated clients to segment operating income: |
|
|||||||||||||||
Inter-segment revenue |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Cost of services and product sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative expense (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating (income) expense, net (3) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Foreign exchange (gain) loss, net (3) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
CODM Measure - Segment operating income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets (4) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(2) General and administrative expense is presented as a total amount to the CODM and consists primarily of employee compensation costs, professional fees and information technology costs.
(4) Total assets at September 30, 2025 included in the Reservoir Description operating segment have been adjusted for certain prior period immaterial corrections. See Note 2 - Significant Accounting Policies Update.
19
Return to Index
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion highlights the current operating environment and summarizes the financial position of Core Laboratories Inc. and its subsidiaries as of September 30, 2026, and should be read in conjunction with (i) the unaudited interim consolidated financial statements and notes thereto included elsewhere in this Quarterly Report and (ii) the audited consolidated financial statements and accompanying notes thereto included in our 2025 Annual Report on Form 10-K for the year ended December 31, 2025.
General
Core Laboratories Inc. is a Delaware corporation. It was established in 1936 and is one of the world's leading providers of proprietary and patented reservoir description and production enhancement services and products to the oil and gas industry. These services and products can enable our clients to evaluate and improve reservoir performance and increase oil and gas recovery from new and existing fields. We make measurements on reservoir rocks, reservoir fluids (crude oil, natural gas and water) and their derived products. In addition, we assist clients in evaluating subsurface targets associated with carbon capture and sequestration projects or initiatives. Core Laboratories Inc. has over 70 offices in more than 50 countries and employs approximately 3,300 people worldwide.
References to “Core Lab”, “Core Laboratories”, the “Company”, “we”, “our” and similar phrases are used throughout this Quarterly Report and relate collectively to Core Laboratories Inc. and its consolidated subsidiaries.
We operate our business in two segments. These complementary operating segments provide different services and products and utilize different technologies for evaluating and improving reservoir performance and increasing oil and gas recovery from new and existing fields.
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). Certain statements contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations section, including those under the headings “Outlook” and “Liquidity and Capital Resources”, and in other parts of this Quarterly Report, are forward-looking. In addition, from time to time, we may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. Forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “believe”, “expect”, “anticipate”, “estimate”, “continue”, or other similar words, including statements as to the intent, belief, or current
20
Return to Index
expectations of our directors, officers, and management with respect to our future operations, performance, or positions or which contain other forward-looking information. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, no assurances can be given that the future results indicated, whether expressed or implied, will be achieved. While we believe that these statements are and will be accurate, our actual results and experience may differ materially from the anticipated results or other expectations expressed in our statements due to a variety of risks and uncertainties.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a more detailed discussion of some of the foregoing risks and uncertainties, see Part II, “Item 1A - Risk Factors” of this Quarterly Report and “Item 1A - Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, filed by us with the Securities and Exchange Commission (“SEC”).
Outlook
Recent geopolitical developments, including the armed conflict in the Middle East (“Middle East Conflict”) have dramatically shifted the crude oil supply-demand balance. On February 28, 2026, the hostilities commenced and since then, Iran and other military groups, including Houthi militants in Yemen, have retaliated against United States and Israeli interests, as well as Saudi Arabia, Kuwait, the United Arab Emirates and other countries in the region, including merchant vessels in the Strait of Hormuz and the Red Sea, and certain energy infrastructure. Approximately 20% of global crude oil production passed through the Strait of Hormuz prior to the Middle East Conflict. These disruptions have resulted in a significant reduction in the supply of crude oil and derived products. Although cargo traffic of crude oil and derived products through the Strait of Hormuz has gradually improved toward the end of the third quarter of 2026, crude oil supply continues to be significantly disrupted. Additionally, the drawdown of inventories through a coordinated global release of oil from strategic petroleum reserves could also create additional volatility in future prices. This has dramatically shifted the balance of crude oil supply-demand and exacerbated maritime trade flows of crude oil and derived products. While the Company believes the fundamentals for energy-related services remain stable, there is near-term volatility in commodity prices, the movement patterns of crude oil, and client activity levels.
The ongoing geopolitical conflicts in the Middle East and between Russia and Ukraine, along with associated and expanded United States, European Union, and United Kingdom sanctions on Iran and Russia, as well as secondary sanctions on buyers of Iranian and Russian crude and derived products continue to cause disruptions to traditional maritime supply chains and the trading of crude oil and derived products, such as fuels. The decline in trading and maritime transport of crude oil has directly impacted, and is expected to continue to impact, demand for the Company’s associated laboratory assay services.
The Company is monitoring developments with respect to these conflicts, including the impact on global commodity prices and potential shipping and logistics disruptions, which could affect our customers and their activity levels in and outside the region. As of the date of the filing of this Quarterly Report, military activity and hostilities continue in the Middle East, and the situation throughout the region remains volatile, with the potential for continued escalation into a broader and more sustained conflict. Iran and its military proxies continue to target critical infrastructure in the region, including refining and pipeline facilities, maritime ports and civilian airports. We have no way to predict the progress or outcome of these events, and any resulting government responses are fluid and beyond our control.
The Company believes that activity levels associated with smaller-scale, short-cycle crude oil development projects will be more sensitive to a decrease and/or continued volatility of crude-oil prices. As such, we expect changes in crude oil prices will marginally improve drilling and completion activity levels in the U.S. onshore market which could directly affect demand for our well completion services and products. Outside the U.S., large-scale international oil and gas projects are expected to be more resilient to the near-term volatility of crude-oil prices, and the Company anticipates client projects will continue to be executed as planned, unless directly impacted by the conflicts mentioned above. We continue to focus on large-scale core analysis and reservoir fluids characterization studies in most oil-producing regions across the globe, which include both newly
21
Return to Index
developed fields and brownfield extensions in both the U.S. and internationally. In the U.S., we are involved in projects in many of the onshore unconventional basins and offshore projects in the Gulf of America and Alaska. Outside the U.S., we continue to work on both small and large-scale projects analyzing rock, reservoir fluids, and crude oil and derived products and sell perforating systems and well diagnostic services in every major producing region of the world. Notable larger projects are underway in the South Atlantic Margin, the Asia-Pacific region, West Africa and the Middle East. Additionally, some of our major international clients continue to invest in carbon capture and sequestration projects.
Our clients continue to focus on capital management, return on invested capital, free cash flow, and returning capital to their shareholders, however there are also indications that replacement of reserves is becoming an important topic. The companies adopting “value versus volume” metrics tend to be the more technologically sophisticated operators and form the foundation of Core Lab’s worldwide client base. The Company expects increasing client activity levels in the coming years focused both on expanding oil and gas reserves and improving production volumes.
22
Return to Index
Results of Operations
Our results of operations as a percentage of applicable revenue are as follows (in thousands):
|
|
Three Months Ended September 30, |
|
|
||||||||||||||
|
|
2026 |
|
2025 |
|
$ Change |
|
|
% Change |
|||||||||
REVENUE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Services |
|
$ |
96,007 |
|
|
73% |
|
$ |
101,125 |
|
|
75% |
|
$ |
(5,118 |
) |
|
(5)% |
Product sales |
|
|
36,070 |
|
|
27% |
|
|
33,396 |
|
|
25% |
|
|
2,674 |
|
|
8% |
Total revenue |
|
|
132,077 |
|
|
100% |
|
|
134,521 |
|
|
100% |
|
|
(2,444 |
) |
|
(2)% |
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Cost of services, exclusive of depreciation expense shown below* |
|
|
75,007 |
|
|
78% |
|
|
74,896 |
|
|
74% |
|
|
111 |
|
|
0% |
Cost of product sales, exclusive of depreciation expense shown below* |
|
|
30,085 |
|
|
83% |
|
|
30,005 |
|
|
90% |
|
|
80 |
|
|
0% |
Total cost of services and product sales |
|
|
105,092 |
|
|
80% |
|
|
104,901 |
|
|
78% |
|
|
191 |
|
|
0% |
General and administrative expense, exclusive of depreciation expense shown below |
|
|
11,268 |
|
|
9% |
|
|
10,688 |
|
|
8% |
|
|
580 |
|
|
5% |
Depreciation and amortization |
|
|
3,724 |
|
|
3% |
|
|
3,594 |
|
|
3% |
|
|
130 |
|
|
4% |
Other (income) expense, net |
|
|
(72 |
) |
|
—% |
|
|
(5,590 |
) |
|
(4)% |
|
|
5,518 |
|
|
(99)% |
OPERATING INCOME |
|
|
12,065 |
|
|
9% |
|
|
20,928 |
|
|
16% |
|
|
(8,863 |
) |
|
(42)% |
Interest expense |
|
|
2,786 |
|
|
2% |
|
|
2,650 |
|
|
2% |
|
|
136 |
|
|
5% |
Income before income taxes |
|
|
9,279 |
|
|
7% |
|
|
18,278 |
|
|
14% |
|
|
(8,999 |
) |
|
(49)% |
Income tax expense |
|
|
3,816 |
|
|
3% |
|
|
3,754 |
|
|
3% |
|
|
62 |
|
|
2% |
Net income |
|
|
5,463 |
|
|
4% |
|
|
14,524 |
|
|
11% |
|
|
(9,061 |
) |
|
(62)% |
Net income (loss) attributable to non-controlling interest |
|
|
19 |
|
|
—% |
|
|
285 |
|
|
—% |
|
|
(266 |
) |
|
NM |
Net income attributable to Core Laboratories Inc. |
|
$ |
5,444 |
|
|
4% |
|
$ |
14,239 |
|
|
11% |
|
$ |
(8,795 |
) |
|
(62)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Current ratio (1) |
|
2.191:1 |
|
|
|
|
2.370:1 |
|
|
|
|
|
|
|
|
|||
Debt to EBITDA ratio (2) |
|
1.726:1 |
|
|
|
|
1.184:1 |
|
|
|
|
|
|
|
|
|||
Debt to Adjusted EBITDA ratio (3) |
|
1.496:1 |
|
|
|
|
1.105:1 |
|
|
|
|
|
|
|
|
|||
“NM” means not meaningful
*Percentage based on applicable revenue rather than total revenue
23
Return to Index
|
|
Three Months Ended |
|
|
||||||||||||||
|
|
September 30, 2026 |
|
June 30, 2026 |
|
$ Change |
|
|
% Change |
|||||||||
REVENUE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Services |
|
$ |
96,007 |
|
|
73% |
|
$ |
94,277 |
|
|
76% |
|
$ |
1,730 |
|
|
2% |
Product sales |
|
|
36,070 |
|
|
27% |
|
|
30,332 |
|
|
24% |
|
|
5,738 |
|
|
19% |
Total revenue |
|
|
132,077 |
|
|
100% |
|
|
124,609 |
|
|
100% |
|
|
7,468 |
|
|
6% |
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Cost of services, exclusive of depreciation expense shown below* |
|
|
75,007 |
|
|
78% |
|
|
75,736 |
|
|
80% |
|
|
(729 |
) |
|
(1)% |
Cost of product sales, exclusive of depreciation expense shown below* |
|
|
30,085 |
|
|
83% |
|
|
25,635 |
|
|
85% |
|
|
4,450 |
|
|
17% |
Total cost of services and product sales |
|
|
105,092 |
|
|
80% |
|
|
101,371 |
|
|
81% |
|
|
3,721 |
|
|
4% |
General and administrative expense, exclusive of depreciation expense shown below |
|
|
11,268 |
|
|
9% |
|
|
10,953 |
|
|
9% |
|
|
315 |
|
|
3% |
Depreciation and amortization |
|
|
3,724 |
|
|
3% |
|
|
3,825 |
|
|
3% |
|
|
(101 |
) |
|
(3)% |
Other (income) expense, net |
|
|
(72 |
) |
|
—% |
|
|
(691 |
) |
|
(1)% |
|
|
619 |
|
|
(90)% |
OPERATING INCOME |
|
|
12,065 |
|
|
9% |
|
|
9,151 |
|
|
7% |
|
|
2,914 |
|
|
32% |
Interest expense |
|
|
2,786 |
|
|
2% |
|
|
2,846 |
|
|
2% |
|
|
(60 |
) |
|
(2)% |
Income (loss) before income taxes |
|
|
9,279 |
|
|
7% |
|
|
6,305 |
|
|
5% |
|
|
2,974 |
|
|
47% |
Income tax expense (benefit) |
|
|
3,816 |
|
|
3% |
|
|
507 |
|
|
—% |
|
|
3,309 |
|
|
653% |
Net income (loss) |
|
|
5,463 |
|
|
4% |
|
|
5,798 |
|
|
5% |
|
|
(335 |
) |
|
(6)% |
Net income (loss) attributable to non-controlling interest |
|
|
19 |
|
|
—% |
|
|
(158 |
) |
|
—% |
|
|
177 |
|
|
NM |
Net income (loss) attributable to Core Laboratories Inc. |
|
$ |
5,444 |
|
|
4% |
|
$ |
5,956 |
|
|
5% |
|
$ |
(512 |
) |
|
(9)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Current ratio (1) |
|
2.191:1 |
|
|
|
|
2.121:1 |
|
|
|
|
|
|
|
|
|||
Debt to EBITDA ratio (2) |
|
1.726:1 |
|
|
|
|
1.476:1 |
|
|
|
|
|
|
|
|
|||
Debt to Adjusted EBITDA ratio (3) |
|
1.496:1 |
|
|
|
|
1.304:1 |
|
|
|
|
|
|
|
|
|||
“NM” means not meaningful
*Percentage based on applicable revenue rather than total revenue
24
Return to Index
|
|
Nine Months Ended September 30, |
|
|
||||||||||||||
|
|
2026 |
|
2025 |
|
$ Change |
|
|
% Change |
|||||||||
REVENUE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Services |
|
$ |
284,536 |
|
|
75% |
|
$ |
292,435 |
|
|
75% |
|
$ |
(7,899 |
) |
|
(3)% |
Product sales |
|
|
93,947 |
|
|
25% |
|
|
95,830 |
|
|
25% |
|
|
(1,883 |
) |
|
(2)% |
Total revenue |
|
|
378,483 |
|
|
100% |
|
|
388,265 |
|
|
100% |
|
|
(9,782 |
) |
|
(3)% |
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Cost of services, exclusive of depreciation expense shown below* |
|
|
226,858 |
|
|
80% |
|
|
221,929 |
|
|
76% |
|
|
4,929 |
|
|
2% |
Cost of product sales, exclusive of depreciation expense shown below* |
|
|
81,678 |
|
|
87% |
|
|
86,142 |
|
|
90% |
|
|
(4,464 |
) |
|
(5)% |
Total cost of services and product sales |
|
|
308,536 |
|
|
82% |
|
|
308,071 |
|
|
79% |
|
|
465 |
|
|
0% |
General and administrative expense, exclusive of depreciation expense shown below |
|
|
36,939 |
|
|
10% |
|
|
34,799 |
|
|
9% |
|
|
2,140 |
|
|
6% |
Depreciation and amortization |
|
|
11,313 |
|
|
3% |
|
|
10,981 |
|
|
3% |
|
|
332 |
|
|
3% |
Other (income) expense, net |
|
|
(1,408 |
) |
|
—% |
|
|
(6,222 |
) |
|
(2)% |
|
|
4,814 |
|
|
(77)% |
OPERATING INCOME |
|
|
23,103 |
|
|
6% |
|
|
40,636 |
|
|
10% |
|
|
(17,533 |
) |
|
(43)% |
Interest expense |
|
|
8,523 |
|
|
2% |
|
|
7,963 |
|
|
2% |
|
|
560 |
|
|
7% |
Income before income taxes |
|
|
14,580 |
|
|
4% |
|
|
32,673 |
|
|
8% |
|
|
(18,093 |
) |
|
(55)% |
Income tax expense |
|
|
4,072 |
|
|
1% |
|
|
7,411 |
|
|
2% |
|
|
(3,339 |
) |
|
(45)% |
Net income |
|
|
10,508 |
|
|
3% |
|
|
25,262 |
|
|
7% |
|
|
(14,754 |
) |
|
(58)% |
Net income (loss) attributable to non-controlling interest |
|
|
(103 |
) |
|
—% |
|
|
541 |
|
|
—% |
|
|
(644 |
) |
|
NM |
Net income attributable to Core Laboratories Inc. |
|
$ |
10,611 |
|
|
3% |
|
$ |
24,721 |
|
|
6% |
|
$ |
(14,110 |
) |
|
(57)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Current ratio (1) |
|
2.191:1 |
|
|
|
|
2.370:1 |
|
|
|
|
|
|
|
|
|||
Debt to EBITDA ratio (2) |
|
1.726:1 |
|
|
|
|
1.184:1 |
|
|
|
|
|
|
|
|
|||
Debt to Adjusted EBITDA ratio (3) |
|
1.496:1 |
|
|
|
|
1.105:1 |
|
|
|
|
|
|
|
|
|||
“NM” means not meaningful
*Percentage based on applicable revenue rather than total revenue
25
Return to Index
Operating Results for the Three Months Ended September 30, 2026 compared to the Three Months Ended September 30, 2025 and June 30, 2026 and for the Nine Months Ended September 30, 2026 compared to the Nine Months Ended September 30, 2025
Service Revenue
Service revenue is primarily tied to activities associated with the exploration, appraisal, development and production of oil, gas and derived products outside the U.S. For the three months ended September 30, 2026, service revenue was $96.0 million, a decrease of 5% year-over-year and an increase of 2% sequentially. Year-over-year, revenue decreased primarily due to lower activity levels in the international markets. International revenue was negatively impacted by the Middle East Conflict that began in the first quarter of 2026 and the ongoing geopolitical conflict between Russia and Ukraine. The limited transit of crude oil through the Strait of Hormuz since the Middle East Conflict began has resulted in temporary supply-chain disruptions, delays and rerouting of crude oil and derived products, which has negatively impacted our laboratory assay services and regional studies. Sanctions previously discussed have disrupted the movement and trading patterns of crude oil and derived products as well as restricted our ability to perform services in certain international markets, primarily Russia. Additionally, demand for our well completion diagnostic services declined during the third quarter of 2026 due to delays in certain client projects in the Gulf of America. These effects were partially offset by higher revenue from reservoir rock and fluid analysis projects in the U.S. and South America during the three months ended September 30, 2026.
Sequentially, service revenue increased in several international regions, including the Middle East, for our laboratory assay services, reservoir fluid and rock analysis projects, however this was partially offset by decreased activity for our well diagnostic services in the U.S. markets, as previously discussed.
For the nine months ended September 30, 2026, service revenue was $284.5 million, a decrease of 3% compared to the same period in the prior year, primarily driven by a decline in the international markets due to the Middle East Conflict and the ongoing geopolitical conflict between Russia and Ukraine, and expanded sanctions as previously discussed. Additionally, severe weather events across North America, Europe, and the Mediterranean region occurring in the first quarter of 2026, negatively impacted certain operations and delayed our client activity in 2026.
Product Sales Revenue
Product sales are tied to both U.S. onshore drilling and completion activities and product sales to international markets. Product sales to international markets are typically sold and shipped in bulk, and revenue can vary from one quarter to another. For the three months ended September 30, 2026, product sales revenue was $36.1 million, an increase of 8% year-over-year and 19% sequentially. Year-over-year, revenue increased primarily due to the increased U.S. onshore drilling and completion activity and continued market penetration of our proprietary perforating products. The increase was partially offset by a lower level of bulk product sales to international markets in 2026.
Sequentially, the increase was primarily due to 1) an increase in demand for completion product sales in the U.S. onshore and certain international markets; 2) the growing adoption of our proprietary perforating products in the U.S. land market; and 3) a higher level of shipments of manufactured laboratory instrumentation during the current quarter.
For the nine months ended September 30, 2026, product sales revenue was $93.9 million, a decrease of 2% compared to the same period in the prior year, primarily due to large shipments of manufactured laboratory instrumentation sales and bulk product sales to international markets that occurred in 2025, which did not repeat in 2026. These declines in instrumentation and international product sales were partially offset by increased product sales in the U.S. onshore markets in 2026 compared to 2025, as previously discussed.
26
Return to Index
Cost of Services, excluding depreciation
Cost of services was $75.0 million for the three months ended September 30, 2026, which was relatively flat year-over-year and a decrease of 1% sequentially. Cost of services expressed as a percentage of service revenue was 78% for the three months ended September 30, 2026, compared to 74% for the same period in the prior year and 80% for the prior quarter. The year-over-year increase in cost of services as a percentage of service revenue was driven by lower revenue as a result of the geopolitical conflicts and expanded sanctions while the Company has continued to carry most of the costs. Cost reduction initiatives have been implemented which helped mitigate the impact on profitability.
Sequentially, cost of services as a percentage of service revenue improved primarily due to higher revenue and slight decrease in costs as a result of cost reduction initiatives as discussed above.
For the nine months ended September 30, 2026, cost of services was $226.9 million, an increase of 2% compared to the same period in the prior year. Cost of services expressed as a percentage of service revenue increased to 80% from 76% when compared to the same period in the prior year. The increases are primarily due to lower revenue as a result of the geopolitical conflicts and associated sanctions, as discussed above.
Cost of Product Sales, excluding depreciation
Cost of product sales was $30.1 million for the three months ended September 30, 2026, which was relatively flat year-over-year and an increase of 17% sequentially. Cost of product sales expressed as a percentage of product sales revenue was 83% for the three months ended September 30, 2026, compared to 90% for the same period in the prior year and 85% in the prior quarter. The year-over-year improvement in cost of product sales as a percentage of product sales revenue was primarily driven by internal initiatives to improve manufacturing efficiencies and the benefit of tariff refunds in 2026. In 2025, the cost of product sales included tariff costs on certain imported materials, along with a write-down of certain inventory, which did not recur in the third quarter of 2026.
Sequentially, the increase in cost of product sales is in line with the increase in product sales. Cost of product sales expressed as a percentage of product sales revenue improved due to absorption of fixed costs on a higher revenue base and benefited from continued internal initiatives to improve manufacturing efficiencies, as discussed above.
For the nine months ended September 30, 2026, cost of product sales was $81.7 million, a decrease of 5% compared to the same period in the prior year. Cost of product sales expressed as a percentage of product sales revenue was 87% for the nine months ended September 30, 2026, compared to 90% for the same period in the prior year. The decrease in cost of product sales and improvement on cost of product sales as a percentage of product sales revenue was achieved in 2026 due to the internal initiatives to improve manufacturing efficiencies and an inventory write-down recorded in the prior year that did not recur in the current year. Additionally, cost of product sales was lower due to tariff refunds received in 2026 associated with tariff cost on certain imported material incurred in 2025.
General and Administrative Expense, excluding depreciation
General and administrative (“G&A”) expense includes corporate management and centralized administrative services that benefit our operations.
G&A expense for the three months ended September 30, 2026, was $11.3 million, which increased $0.6 million year-over-year and $0.3 million sequentially. The year-over-year increase was primarily due to changes in employee compensation and contract labor costs in these periods. Sequentially, the increase was primarily due to a higher loss of $0.3 million associated with changes in market value on the Company’s investment in corporate life insurance policies.
For the nine months ended September 30, 2026, G&A expense was $36.9 million, an increase of $2.1 million year-over-year. The year-over-year increase was primarily due to a reversal of stock compensation expense of $1.7 million recorded in 2025 to
27
Return to Index
align with achievement of certain performance conditions, and no such adjustments in 2026, and higher contract labor costs recorded in 2026 compared to the same period in 2025.
Depreciation and Amortization Expense
Depreciation and amortization expense for the three months ended September 30, 2026, was $3.7 million, compared to $3.6 million in 2025 and $3.8 million in the prior quarter. Depreciation and amortization expense for the nine months ended September 30, 2026, was $11.3 million, compared to $11.0 million in 2025. The increases in depreciation and amortization expense for the three and nine months ended September 30, 2026, compared to the prior year periods were primarily due to higher spending in capital expenditures to replace fully depreciated assets. Sequentially, the slight decrease was primarily due to fixed asset disposals during the second quarter of 2026.
Other (Income) Expense, Net
The components of other (income) expense, net, are as follows (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Gain on sale of assets |
|
$ |
(57 |
) |
|
$ |
(146 |
) |
|
$ |
(1,277 |
) |
|
$ |
(369 |
) |
Results of non-consolidated subsidiaries |
|
|
135 |
|
|
|
194 |
|
|
|
399 |
|
|
|
401 |
|
Foreign exchange (gain) loss, net |
|
|
548 |
|
|
|
354 |
|
|
|
1,147 |
|
|
|
841 |
|
Return on pension assets and other pension costs |
|
|
(339 |
) |
|
|
(312 |
) |
|
|
(1,034 |
) |
|
|
(893 |
) |
Assets write-down, loss on lease termination and other exit costs |
|
|
— |
|
|
|
— |
|
|
|
639 |
|
|
|
707 |
|
Insurance recovery - business interruption and costs |
|
|
(186 |
) |
|
|
(52 |
) |
|
|
(361 |
) |
|
|
(1,031 |
) |
Insurance recovery, net - property, plant and equipment |
|
|
— |
|
|
|
(5,253 |
) |
|
|
— |
|
|
|
(6,830 |
) |
Severance and other charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,256 |
|
Other, net |
|
|
(173 |
) |
|
|
(375 |
) |
|
|
(921 |
) |
|
|
(1,304 |
) |
Total other (income) expense, net |
|
$ |
(72 |
) |
|
$ |
(5,590 |
) |
|
$ |
(1,408 |
) |
|
$ |
(6,222 |
) |
As a result of our continuous efforts in consolidating and exiting certain facilities in the U.S. and other international locations for operational efficiency, we sold property in Tulsa, Oklahoma for a net gain of $0.9 million during the nine months ended September 30, 2026. In addition, we recognized write-downs of leasehold improvements, right of use assets and other assets and incurred lease termination and other exit costs of $0.6 million and $0.7 million during the nine months ended September 30, 2026 and 2025, respectively.
In February 2024, we had a fire incident at our Aberdeen, U.K. facility, and we have recorded insurance recovery associated with business interruption and other associated costs of $0.1 million and $1.0 million during the three and nine months ended September 30, 2025, respectively.
Additionally, we recorded a net insurance recovery associated with loss on property and assets of $5.3 million and $6.8 million during the three and nine months ended September 30, 2025, respectively. Core Lab reached final settlement with the insurance company in September 2025.
In January 2026, we had storm damage at one of our laboratory facilities in Europe, and we have recorded a partial insurance settlement associated with business interruption and other associated costs of $0.2 million and $0.4 million during the three and nine months ended September 30, 2026, respectively.
28
Return to Index
Foreign exchange (gain) loss, net for the primary currencies in which we operate and those with a material effect for the period presented is summarized in the following table (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
British Pound |
|
$ |
78 |
|
|
$ |
(48 |
) |
|
$ |
52 |
|
|
$ |
(108 |
) |
Canadian Dollar |
|
|
(4 |
) |
|
|
43 |
|
|
|
27 |
|
|
|
(11 |
) |
Euro |
|
|
120 |
|
|
|
(30 |
) |
|
|
81 |
|
|
|
772 |
|
Indonesian Rupiah |
|
|
34 |
|
|
|
100 |
|
|
|
215 |
|
|
|
133 |
|
Russian Ruble |
|
|
500 |
|
|
|
144 |
|
|
|
432 |
|
|
|
(189 |
) |
Other currencies, net |
|
|
(180 |
) |
|
|
145 |
|
|
|
340 |
|
|
|
244 |
|
Foreign exchange (gain) loss, net |
|
$ |
548 |
|
|
$ |
354 |
|
|
$ |
1,147 |
|
|
$ |
841 |
|
Interest Expense
Interest expense for the three months ended September 30, 2026, was $2.8 million compared to $2.7 million in 2025 and $2.8 million in the prior quarter. For the nine months ended September 30, 2026, interest expense increased to $8.5 million compared to $8.0 million in 2025. For the three and nine months ended September 30, 2026, the year-over-year increase in interest expense is primarily due to higher variable interest rates on the $50.0 million delayed draw term loan that was used to retire the fixed rate $45.0 million 2021 Senior Notes Series A in the first quarter of 2026. This was partially offset by lower average borrowings and interest rates on our revolving credit facility.
Sequentially, the slight decrease in interest expense was primarily due to lower average borrowings on our revolving credit facility and delayed draw term loan in the third quarter of 2026.
Income Tax Expense
The Company recorded an income tax expense of $3.8 million and $4.1 million for the three and nine months ended September 30, 2026, compared to income tax expense of $3.8 million and $7.4 million for the three and nine months ended September 30, 2025, respectively. The effective tax rate for the three and nine months ended September 30, 2026, was 41.1% and 27.9%, respectively. The effective tax rate for the three and nine months ended September 30, 2025, was 20.5% and 22.7%, respectively. The effective tax rate for the three and nine months ended September 30, 2026 was primarily impacted by the jurisdictional earnings mix subject to tax for the period. The effective tax rate for the three and nine months ended September 30, 2025, was primarily impacted by the jurisdictional earnings mix subject to tax for the period, changes in uncertain tax positions in certain jurisdictions and discrete expenses in the period.
Segment Analysis
We operate our business in two segments. These complementary operating segments provide different services and products and utilize different technologies for evaluating and improving reservoir performance and increasing oil and gas recovery from new and existing fields. The following tables summarize our results by operating segment (in thousands):
29
Return to Index
|
|
Three Months Ended |
|
Year-Over-Year |
|
Sequential |
||||||||||||||||
|
|
September 30, 2026 |
|
September 30, 2025 |
|
June 30, 2026 |
|
% Change |
|
% Change |
||||||||||||
REVENUE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Reservoir Description |
|
$ |
84,318 |
|
|
64% |
|
$ |
88,224 |
|
|
66% |
|
$ |
78,747 |
|
|
63% |
|
(4)% |
|
7% |
Production Enhancement |
|
|
47,759 |
|
|
36% |
|
|
46,297 |
|
|
34% |
|
|
45,862 |
|
|
37% |
|
3% |
|
4% |
Consolidated |
|
$ |
132,077 |
|
|
100% |
|
$ |
134,521 |
|
|
100% |
|
$ |
124,609 |
|
|
100% |
|
(2)% |
|
6% |
OPERATING INCOME: |
||||||||||||||||||||||
Reservoir Description * |
|
$ |
7,703 |
|
|
9% |
|
$ |
16,574 |
|
|
19% |
|
$ |
3,678 |
|
|
5% |
|
(54)% |
|
109% |
Production Enhancement * |
|
|
4,327 |
|
|
9% |
|
|
4,379 |
|
|
9% |
|
|
5,228 |
|
|
11% |
|
(1)% |
|
(17)% |
Corporate and Other (1) |
|
|
35 |
|
|
0% |
|
|
(25 |
) |
|
0% |
|
|
245 |
|
|
0% |
|
NM |
|
NM |
Consolidated |
|
$ |
12,065 |
|
|
9% |
|
$ |
20,928 |
|
|
16% |
|
$ |
9,151 |
|
|
7% |
|
(42)% |
|
32% |
* Percentage, which represents operating margins, is based on operating income divided by applicable revenue rather than total revenue. |
||||||||||||||||||||||
|
|
Nine Months Ended September 30, |
|
Year-over-year |
||||||||||
|
|
2026 |
|
2025 |
|
% Change |
||||||||
REVENUE: |
|
|
|
|
|
|
|
|
|
|
|
|
||
Reservoir Description |
|
$ |
244,996 |
|
|
65% |
|
$ |
255,401 |
|
|
66% |
|
(4)% |
Production Enhancement |
|
|
133,487 |
|
|
35% |
|
|
132,864 |
|
|
34% |
|
0% |
Consolidated |
|
$ |
378,483 |
|
|
100% |
|
$ |
388,265 |
|
|
100% |
|
(3)% |
OPERATING INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
||
Reservoir Description * |
|
$ |
12,527 |
|
|
5% |
|
$ |
31,116 |
|
|
12% |
|
(60)% |
Production Enhancement * |
|
|
10,359 |
|
|
8% |
|
|
9,030 |
|
|
7% |
|
15% |
Corporate and Other (1) |
|
|
217 |
|
|
0% |
|
|
490 |
|
|
0% |
|
NM |
Consolidated |
|
$ |
23,103 |
|
|
6% |
|
$ |
40,636 |
|
|
10% |
|
(43)% |
* Percentage, which represents operating margin, is based on operating income divided by applicable revenue rather than total revenue. |
||||||||||||||
Reservoir Description
Reservoir Description operations are closely correlated with trends in international and offshore activity levels, with approximately 80% of its revenue sourced from existing producing fields, development projects and movement of crude oil products outside the U.S.
Revenue from the Reservoir Description operating segment of $84.3 million for the three months ended September 30, 2026 decreased 4% year-over-year and increased 7% sequentially. Year-over-year, revenue decreased in several international regions as a result of the continued conflicts in the Middle East, and between Russia and Ukraine, as well as the expanded sanctions previously discussed which have disrupted client activity and demand for our laboratory assay work and regional studies. These effects were partially offset by higher revenue from reservoir rock and fluid analysis projects in the U.S. and South America during the three months ended September 30, 2026.
Sequentially, activities and projects by our international clients increased, resulting in higher demand for our laboratory assay work, as well as reservoir rock and fluid analysis projects in several international regions. Additionally, the current quarter includes a higher level of manufactured laboratory instrumentation sales.
Revenue from the Reservoir Description operating segment of $245.0 million for the nine months ended September 30, 2026, decreased 4% from the same period in the prior year. The decrease in revenue was primarily due to 1) the Middle East Conflict that began in the first quarter of 2026; 2) the ongoing geopolitical conflict in Russia and Ukraine, including sanctions that were expanded significantly in the fourth quarter of 2025; and 3) the shipments of manufactured laboratory instrumentation sales that
30
Return to Index
occurred in 2025 which did not repeat in 2026. The decreases in 2026, described above, were partially offset by higher reservoir rock and fluid analysis projects in the U.S.
Operating income of $7.7 million for the three months ended September 30, 2026, decreased year-over-year by $8.9 million and increased $4.0 million sequentially. Operating margins were 9% for the three months ended September 30, 2026, compared to 19% for the same period in the prior year, and 5% sequentially. Year-over-year, the decrease in operating income and operating margins was primarily attributable to 1) decremental revenue of $3.9 million with high decremental margins primarily caused by the geopolitical conflicts mentioned above; and 2) a gain on insurance recovery in prior year of $5.3 million recorded in 2025, compared to $0.2 million gain on insurance recovery in 2026.
Sequentially, the increase in operating income and operating margins was primarily driven by the incremental revenue of $5.6 million due to recovery of activity levels in the Middle East and other international locations, as discussed above.
Operating income of $12.5 million for the nine months ended September 30, 2026, decreased $18.6 million from the same period in the prior year. Operating margins were 5% for the nine months ended September 30, 2026, compared to 12% for the same period in the prior year. The decreases in operating income and operating margins were primarily attributable to 1) decremental revenue of $10.4 million primarily caused by the conflicts discussed above; and 2) a prior year insurance recovery of $7.9 million recorded in the nine months ended September 30, 2025 compared to $0.4 million recorded in 2026.
Production Enhancement
Production Enhancement operations are largely focused on complex completions in unconventional oil and gas reservoirs in the U.S. as well as conventional projects across the globe. U.S. onshore drilling and completion activities typically experience a seasonal decline at end of the year with activity levels increasing at the beginning of the year. Average rig count in the U.S. onshore market for the three months ended September 30, 2026, increased by approximately 10% year-over-year and 7% sequentially. International average rig count increased by 3% year-over-year and 5% sequentially.
Revenue from the Production Enhancement operating segment of $47.8 million for the three months ended September 30, 2026, increased 3% year-over-year and 4% sequentially. Year-over-year, the increase was primarily driven by continued growth in completion and proprietary perforating product sales in the U.S. onshore market, however this was partially offset by lower revenue from our well diagnostic services in 2026 compared to the same period in 2025. The decrease in well diagnostic services during the third quarter of 2026 was primarily the result of delays in certain client projects in the Gulf of America.
Sequentially, the increase was driven by higher demand for completion and proprietary perforating products in both the U.S. onshore and certain international markets. The increased revenue was partially offset by a decrease in well completion diagnostic services during the third quarter of 2026 due to delays in certain client projects in the Gulf of America.
Revenue from the Production Enhancement operating segment of $133.5 million for the nine months ended September 30, 2026, remained relatively flat compared to the same period in the prior year. The increase in completion and proprietary perforating product sales revenue was substantially offset by a lower level of product sales to international markets and a decline in well completion diagnostic services in 2026 as discussed above.
Operating income of $4.3 million for the three months ended September 30, 2026, was relatively flat year-over-year, and decreased compared to $5.2 million sequentially. Operating margins for the three months ended September 30, 2026, were 9%, compared to operating margins of 9% year-over-year and 11% sequentially. Year-over-year, the operating income and margins were relatively flat despite a 3% increase in revenue. In 2026, the revenue mix includes a higher volume of product sales which have lower margins and lower well diagnostic service revenue which generates higher margins. Furthermore, the cost of raw materials and supplies increased in 2026 compared to 2025. Additionally, there were inventory write-downs recorded in 2025 and no similar transactions in 2026.
31
Return to Index
Sequentially, the decrease in operating income and margins despite higher revenue was primarily due to 1) changes in revenue mix with higher product sales and a lower level of diagnostic services, which yield higher margins; and 2) higher refund of tariffs received in the prior quarter.
Operating income of $10.4 million for the nine months ended September 30, 2026, increased $1.3 million compared to the same period in the prior year. Operating margins for the nine months ended September 30, 2026 of 8% improved from 7% in the same period in the prior year. The increase in operating income and margins was primarily due to 1) refund of tariffs received in 2026; and 2) charges associated with employee severance, facility consolidation and inventory write-downs recorded in 2025 and no similar transactions in 2026. These improvements were partially offset by an increase in the cost of raw materials and supplies in 2026 when compared to 2025.
Liquidity and Capital Resources
General
We have historically financed our activities through cash on hand, cash flows from operations, bank credit facilities, equity financing and the issuance of debt. Cash flows from operating activities provide the primary source of funds to finance operating needs, capital expenditures, dividends and discretionary share repurchases. Our ability to maintain and grow our operating income and cash flow depends, to a large extent, on continued investing activities. We believe our future cash flows from operations, supplemented by our borrowing capacity and the ability to issue additional equity and debt, should be sufficient to fund our debt requirements, capital expenditures, working capital, dividends, discretionary share repurchases and future acquisitions. The Company will continue to monitor and evaluate the availability of capital in the debt and equity markets.
We are a holding company incorporated in Delaware and we conduct substantially all of our operations through our subsidiaries. Our cash availability is largely dependent upon the ability of our subsidiaries to pay cash dividends or otherwise distribute or advance funds to us and on the terms and conditions of our existing and future credit arrangements. There are no restrictions preventing any of our subsidiaries from repatriating earnings, except for the unrepatriated earnings of our Russian subsidiary which are not expected to be distributed in the foreseeable future, and there are no restrictions or income taxes associated with distributing cash to the parent company through loans or advances.
Cash Flows
As of September 30, 2026, we had $21.4 million of cash and cash equivalents, compared to $22.7 million of cash and cash equivalents at December 31, 2025. As of September 30, 2026, $20.4 million of our $21.4 million of cash was held by our foreign subsidiaries.
Cash flows from operating activities were $16.7 million for the nine months ended September 30, 2026, compared to $29.1 million for the same period in the prior year. The decrease compared to the same period in the prior year was primarily due to lower profitability during 2026, which has been primarily impacted by the Middle East Conflict which began in the first quarter of 2026 and expanded sanctions on Russia, as discussed above. In 2026, the cost of certain raw materials used in the manufacturing of completion and perforating products increased, resulting in higher levels of inventory.
Other sources of cash during the nine months ended September 30, 2026, include receipt of $3.1 million from the sale of assets, primarily associated with sales of property in Tulsa, Oklahoma of $1.2 million and machinery of $1.4 million. See also “Credit Facility, Senior Notes and Available Future Liquidity” below regarding a net increase in our debt of $1.8 million.
Uses of cash during the nine months ended September 30, 2026 primarily include: 1) total capital expenditures of $14.4 million, which includes $3.0 million related to the rebuilding of the facility and replacement of assets damaged in the Aberdeen, U.K. fire incident which have been covered by insurance proceeds received in 2025; 2) share repurchases of $7.7
32
Return to Index
million, which includes payments related to personal tax liabilities of participants in our stock-based compensation plan; and 3) quarterly dividends paid of $1.4 million.
We utilize the non-GAAP financial measure of free cash flow to evaluate our cash flows and results of operations. Free cash flow is defined as net cash provided by operating activities (which is the most directly comparable GAAP measure) less cash paid for capital expenditures. Management believes that free cash flow provides useful information to investors regarding the cash available in the period that was in excess of our needs to fund our capital expenditures and operating activities. Free cash flow is not a measure of operating performance under GAAP and should not be considered in isolation nor construed as an alternative to operating income, net income or cash flows from operating, investing or financing activities, each as determined in accordance with GAAP. Free cash flow does not represent residual cash available for distribution because we may have other non-discretionary expenditures that are not deducted from the measure. Moreover, since free cash flow is not a measure determined in accordance with GAAP and thus is susceptible to varying interpretations and calculations, free cash flow as presented may not be comparable to similarly titled measures presented by other companies. The following table reconciles this non-GAAP financial measure to the most directly comparable measure calculated and presented in accordance with GAAP (in thousands):
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Free cash flow calculation: |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
$ |
16,743 |
|
|
$ |
29,085 |
|
Less: Cash paid for capital expenditures - operations |
|
|
(11,381 |
) |
|
|
(8,265 |
) |
Free cash flow |
|
$ |
5,362 |
|
|
$ |
20,820 |
|
Free cash flow for the nine months ended September 30, 2026 was $5.3 million compared to $20.8 million for the same period in 2025. The net cash provided by operating activities of $16.7 million during the nine months ended September 30, 2026 compared to $29.1 million for the same period in 2025 was primarily due to the factors as discussed in cash flow from operating activities above. Capital expenditures - operations, which exclude capital expenditures of $3.0 million associated with the Aberdeen, U.K. fire incident that are covered by insurance, increased by $3.1 million during the nine months ended September 30, 2026 compared to the same period in the prior year.
Credit Facility, Senior Notes and Available Future Liquidity
We, along with our direct subsidiary Core Laboratories (U.S.) Interests Holdings, Inc. (“CLIH”), have a secured credit facility for an aggregate borrowing commitment of $150.0 million with a $50.0 million “accordion” feature (“Credit Facility”). Draws up to $100.0 million are available in the form of a revolving credit facility, and a single draw of $50.0 million was made in the form of a delayed draw term loan on January 12, 2026. The $50.0 million proceeds from the delayed draw term loan were primarily used to retire $45 million of the senior notes which matured on January 12, 2026, as discussed below. As of September 30, 2026, the Credit Facility has an available borrowing capacity of approximately $81.6 million.
Additionally, we along with CLIH as issuer, have senior notes outstanding that were issued through private placement transactions (“Senior Notes”). On January 12, 2026, we repaid the 2021 Senior Notes Series A with aggregate principal amount of $45.0 million upon the maturity date with the single draw of $50.0 million from the delayed draw term loan.
These debt instruments are summarized in the following table (in thousands):
33
Return to Index
|
Interest Rate |
|
Maturity Date |
|
September 30, |
|
|
December 31, |
|
||
Revolving Credit Facility |
Variable |
|
July 22, 2029 |
|
$ |
1,000 |
|
|
$ |
3,000 |
|
Delayed Draw Term Loan |
Variable |
|
July 22, 2029 |
|
|
48,750 |
|
|
|
— |
|
2021 Senior Notes Series A (1) |
4.09% |
|
January 12, 2026 |
|
|
— |
|
|
|
45,000 |
|
2021 Senior Notes Series B (1) |
4.38% |
|
January 12, 2028 |
|
|
15,000 |
|
|
|
15,000 |
|
2023 Senior Notes Series A (2) |
7.25% |
|
June 28, 2028 |
|
|
25,000 |
|
|
|
25,000 |
|
2023 Senior Notes Series B (2) |
7.50% |
|
June 28, 2030 |
|
|
25,000 |
|
|
|
25,000 |
|
Total long-term debt |
|
|
|
|
|
114,750 |
|
|
|
113,000 |
|
Less: Debt issuance costs |
|
|
|
|
|
(2,303 |
) |
|
|
(2,745 |
) |
Long-term debt, net |
|
|
|
|
$ |
112,447 |
|
|
$ |
110,255 |
|
(1) Interest is payable semi-annually on June 30 and December 30.
(2) Interest is payable semi-annually on March 28 and September 28.
See Note 6 - Long-term Debt, net of the Notes to the Interim Consolidated Financial Statements for additional information regarding the terms and financial covenants of the Credit Facility and the Senior Notes.
In accordance with the terms of the Credit Facility, our interest coverage ratio is 5.608 and our leverage ratio is 1.496 each for the period ended September 30, 2026. We are in compliance with all covenants contained in our Credit Facility and Senior Notes as of September 30, 2026. Certain of our material, wholly owned subsidiaries are guarantors or co-borrowers under the Credit Facility and Senior Notes.
See Note 10 - Derivative Instruments and Hedging Activities of the Notes to the Interim Consolidated Financial Statements, for additional information regarding interest rate swap agreements we have entered to fix the underlying risk-free rate on our 2023 Senior Notes Series A and B.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in market risk from the information provided in Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” of Core Laboratories Inc.'s Annual Report on Form 10-K for the year ended December 31, 2025.
Item 4. Controls and Procedures
A complete discussion of our controls and procedures is included in Item 9A. “Controls and Procedures” of Core Laboratories Inc.'s Annual Report on Form 10-K for the year ended December 31, 2025.
Disclosure Controls and Procedures
Our management, under the supervision of and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2026, at the reasonable assurance level.
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. Further, the design of disclosure controls and internal control over financial reporting must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because
34
Return to Index
of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
Changes in Internal Control Over Financial Reporting
There have been no changes in our system of internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the fiscal quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
CORE LABORATORIES INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See Note 8 - Commitments and Contingencies of the Notes to the Interim Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report.
Item 1A. Risk Factors
Our business faces many risks. Any of the risks discussed in this Quarterly Report or our other SEC filings could have a material impact on our business, financial position or results of operations.
Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations. For a detailed discussion of the risk factors that should be understood by any investor contemplating investment in our securities, please refer to “Item 1A - Risk Factors” in Core Laboratories Inc.’s Annual Report on Form 10-K for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
Issuer Purchases of Equity Securities
The following table provides information about our purchases of shares of our common stock, par value $0.01, that are registered by us pursuant to Section 12 of the Exchange Act during the three months ended September 30, 2026:
Period |
|
Total Number |
|
|
Average Price |
|
|
Total Number of Shares |
|
|
Maximum Number of |
|
||||
July 1-31, 2026 |
|
|
358 |
|
|
$ |
11.57 |
|
|
|
— |
|
|
|
— |
|
August 1-31, 2026 |
|
|
23,427 |
|
|
$ |
11.21 |
|
|
|
— |
|
|
|
— |
|
September 1-30, 2026 |
|
|
64,088 |
|
|
$ |
12.25 |
|
|
|
— |
|
|
|
— |
|
Total |
|
|
87,873 |
|
|
$ |
11.97 |
|
|
|
— |
|
|
|
|
|
35
Return to Index
Item 5. Other Information
During the three months ended September 30, 2026, no director or officer of the Company
36
Return to Index
Item 6. Exhibits
Exhibit No. |
|
Exhibit Title |
|
Incorporated by reference from the following documents |
31.1 |
- |
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
Filed herewith |
31.2 |
- |
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
Filed herewith |
32.1 |
- |
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
Furnished herewith |
32.2 |
- |
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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Furnished herewith |
101.INS |
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Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
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Filed herewith |
101.SCH |
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Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
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Filed herewith |
104 |
- |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
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Filed herewith |
37
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant, Core Laboratories Inc., has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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CORE LABORATORIES INC. |
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Date: |
October 29, 2026 |
By: |
/s/ Christopher S. Hill |
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Christopher S. Hill |
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Chief Financial Officer |
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(Duly Authorized Officer and |
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Principal Financial Officer) |
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38
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